Project portfolio management

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The project portfolio management includes the analysis and overall management of a project portfolio with the key characteristics of the projects. The goal of project portfolio management is to find the optimal mix of projects within the given conditions (such as customer concerns, strategic objectives or available resources), which can make the greatest contribution to achieving the goals of the organization.

The main aim of project portfolio management is to find and select the right projects. These projects will form the project portfolio. Thus, the project portfolio management is primarily aimed at a higher effectiveness of project management, especially during the effective implementation of projects is at the forefront of project management in general.

  • 6.1 Prevention of duplication
  • 6.2 Unification of project management procedures

Definition

A definition of project portfolio management provides the Swiss specialist author Bruno Jenny: "The project portfolio management leads all projects a guide unit. This includes all the tasks that are necessary for prioritizing, coordinating, controlling and supporting the upcoming and ongoing projects and the necessary resources from Project Portfolio view. "

Somewhat more broadly, one can understand all projects within an organization or a completed portion of an organization under Project Portfolio Management permanent planning, prioritization, cross control and monitoring.

The tasks of project portfolio management

  • The definition of projects and programs for the implementation of higher-level organizational goals,
  • The assessment of proposed projects,
  • The approval, deferral and rejection of project proposals,
  • The ongoing monitoring of projects from the perspective of the client,
  • The perception of cross- project and quality management tasks and
  • The cross-project information and knowledge management.

Recently, in connection with the project portfolio management also spoken of strategic (multi ) project management (see also multi-project management ).

Demarcation

While the project management of individual projects or programs (see program management ) with the completion of the projects ends ( life orientation), it is in project portfolio management to an ongoing task that is repeated cyclically.

Multi-project management is concerned with the coordinated management of multiple projects and the project portfolio management subordinated in this sense.

Consequences of the project portfolio

Projects within the project portfolio of an organization are often among themselves to compete

  • Of management attention
  • Availability of resources

Comparative selection of projects in a project portfolio

Various methods are - z.T. in combination - used:

Monetary process

Project comparison based on the NPV ( Net Present Values ​​- net present value ) of projects over a given period of time. In the example, this period four years, which are Future Values ​​( future values ​​of income expectations ) is the discount rate ( discount rate) discounted at the used compared Present Values ​​( NPVs ) to determine:

Instead of the NPV can also IRR ( Internal Rate of Return - IRR ) are used.

Strategic Assessment

Another approach uses Strategic Scoring - the strategic evaluation of projects under weighted criteria:

Multidimensional viewing

Often, the results are considered in combination:

In the example above, it is for Project1, which is neither strategically nor financially attractive, most unlikely that it is running. Although project4 costs a lot, but is strategically interesting. Project5 is indeed strategically irrelevant, but financially attractive. Project3 is both strategically and financially attractive.

Nonlinear optimization against a constraint ( a constraint )

Various factors may restrict the possibilities of an organization to carry out projects such as Personnel, financial resources, technical limitations or the need the organization's ability to control ongoing change, not to overwhelm.

The following example is a selection from a list of seven potential projects is made in a decision tree. The selection is limited by a budget of $ 10,000,000. The project selection remains with total costs of $ 7,740,000 within this limitation and offers the highest possible payoff of $ 2,710,000. All other combinations of projects would either generate a lower payoff or exceed the budget.

Other tasks of project portfolio management

Prevention of duplication

Especially in large organizations with many sub- organizations (eg businesses ), it may happen that projects with similar objectives are performed in parallel without the Portfolio Manager know about it.

Standardization of project management practices

In many organizations, a PMO ( Project Management Office ) to ensure that the project managers develop uniformity in

  • Terminology and Glossary
  • Methods used
  • Forms, templates, tools
  • Communication and Reporting
  • Other elements of project management
Terminal value (finance)
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